Reading Foreign Exchange Quotes

By Bart Icles

The foreign exchange market can overwhelm a lot of people. Having a good grasp of foreign exchange trading can help you a lot in starting your foreign exchange venture. After having substantial knowledge of the basics of the foreign exchange market, you can start working on learning how to buy and sell currencies.

Learning how to read foreign exchange quotes in spot markets is a basic step in foreign exchange trading. A currency is quoted in relation to another currency, wherein the value of one currency is shown through the value of another. A foreign exchange quote typically looks like this: USD/EUR = 0.7076. This reads that one US dollar is equivalent to 0.7076 Euros. The currency on the left side of the slash is the base currency and the one on the right is the quote or counter currency. When taken together, this is what foreign exchange market players refer to as a currency pair.

Normally, currencies are traded in the foreign exchange market with the US dollar as the base currency. When a quote does not indicate the US dollar as one of its components, it is called a cross currency. An example of a cross currency pair is EUR/JPY, wherein the quote will indicate how much Japanese yen does one Euro cost. Cross currencies can open new opportunities in the foreign exchange market. However, you should take note that cross currencies are not as actively traded than pairs that include the US dollar.

Currencies can be quoted in two ways: directly and indirectly. Direct currency quotes are simply currency pairs wherein the domestic currency is the base currency. In contrast, indirect currency quotes are those where the domestic currency is the quoted or counter currency. For example, you are looking at the Euro as the domestic currency and the US dollar as the foreign currency. The direct currency quote for this pair should read EUR/USD, and its indirect currency quote is USD/EUR.

You should also be familiar with the bidding and asking prices in the foreign exchange market. Currency pairs are traded with bid and ask prices, wherein the bid price is they buying price and the ask price is the selling price in relation to the base currency. In buying a currency pair, the ask price is the amount of quoted currency that need to be paid to buy one unit of the base currency. The bid price on the other hand is the amount of quoted currency that can be bought with one unit of the base currency.

Two other terms that you also need to be familiar with are spreads and pips. Spreads refer to the difference between the bid price and the ask price. A pip is the smallest movement that a currency price can make. In a currency pair that reads USD/EUR = 0.7076/03, the spread is 0.0003 or 3 pips. A change of three pips would result to 0.7079 from 0.7076. - 23210

About the Author:

Don't be scared off by a forex killer blog it is a powerful tool in your forex education. Blogs that give advice about trading strategies and money management skills are great resources to learn more about forex trading.

Is Etoro One Of The Most Profitable Forex Trading Platforms?

By Slava Chian

eToro provides one of the best and most user-friendly forex trading platforms available anywhere.There are several factors that make eToro stand head and shoulders above the competition:

User-Friendly. eToro makes sure that you get up and trading in no time. It has an extremely graphical user interface that gets you up and running in less than five minutes. This makes sure that you can focus on trading rather than reading help files and forums. There is also a range of trading tools to help you trade profitably.

Simplicity. With the simple and visual platform, even the most novice trader can learn how to use it in no time. By representing trading activity in a simple visual manner you have the opportunity to learn and understand forex.

Innovation. eToro is committed to staying at the forefront of the online forex revolution which means they are constantly growing and evolving in order to provide you with the best forex trading experience.

No Commissions. They charge absolutely zero commissions on all forex trading activity, including no rollover fees. On top of that they offer bottom low spreads - as low as 2 pips and an unbelievably low initial margin requirement of just $50.

Reliability. eToro is backed by leading forex brokers, providing superb trading capabilities. Your trades are executed immediately and with excellent precision.

Demo Mode. Demo mode offers unlimited trading at live market rates, so you can practice without risking a cent. As forex is an ongoing learning experience, there is no reason why you should risk your money while trying out new strategies.

Great Customer Service. eToro's professional and friendly representatives are there to answer any questions 24 hours a day. They treat customers with respect and provide top notch customer service.

Trader Support. eToro is developing an active and diverse community of users by sponsoring several forums and chat-rooms. - 23210

About the Author:

Before you start trading learn more on one of the greatest currency trading platforms. You can also learn how to thrive during the recession trading foreign exchange.

How to start investing in the stock market

By Larry Matteson

Even in the rough economy, there are many who want to learn how to invest in the stock market. Though it may seem scary, starting now is not a bad idea since there are many good deals to be had.

No matter what you do or learn, investing in the stock market will always be risky. No way around it. However, you can help reduce this risk by creating a solid system and sticking to it. Many brokerage services offer to automatically withdraw money from your bank account at regular intervals, ensuring you are always adding to your nest egg. However, do not do this unless you have a solid system you can stick to in place first, or else you will simply be wasting your money.

Don't rush into investing. Don't put large amounts of money in the market right away until you know what you are doing. You can start investing with very small amounts of money (even less than $100), and get a feel for how investing works.

Everybody worries about a recession. There is no foolproof way of avoiding one, however. You can minimize your losses by investing in recession resistent industries (expect lower rates of return overall, though) and by diversifying. If your portfolio is around $100 this might be hard, but that will change as you invest more.

You should monitor your stock selections once a week; do not do it every day or it will drive you insane. Stock prices go up and down all the time so you need to take the returns week by week and then assess whether or not to sell your stocks.

You should have a diversified stock portfolio; do not invest in just one company or industry. This will allow you to have a good mix of stocks in case a certain industry or company has a rough time.

Investing in stocks takes a lot of discipline and hard work; you need to make sure that you monitor your stock portfolio and seek financial advice if necessary. Anyone can learn how to invest in the stock market properly. If you want to invest in the stock market then you should take the first step and open a stock account. The best way to help the economy is for everyone to learn about investing and help the stock market get healthy so that we can all be prosperous. - 23210

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To learn more about buying stocks, be sure to swing by my site and find out about how to begin investing.

How to Invest For Retirement

By Joe James

Saving for your future is very important. You work all your life and you want to be able to live comfortably without working and enjoy the fruits of your labor. The Best Way to do that is to invest your money in either a 401k or IRA retirement fund. These retirement funds give you a lot of flexibility and tax benefits so you can maximize your savings. However, they are very different types of funds and must be used differently.

401k is named after the tax code which is relates too. This is a employer based retirement plan in which you pay money into the plan before you are taxes. The money is then invested into the stock options you picked. The employer also contributes to the number too. The money is taxed on the way out so if you are in a higher tax bracket you will have to pay more money.

With this type of plan, you can invest up to 14,000 dollars per year, which is the sum of both your contribution and that of your employer. A 401(K) is great investment if your employer is matching your contribution. If they are, you should always invest up to the that number. But since your probably will be in a higher tax bracket when you are older, you should focus more of your investments in a roth IRA, which is tax free upon withdrawal.

An IRA is for an individual person. It's just like owning a normal investment account as you can put the money in anything you want. You can hold cash, bonds, or stocks. The investment limit is $5000 a year for age 49 or below. The money you put in is after you paid taxes but it comes out tax free when you are older. However, you have to pay an early withdrawal penalty if you take money out before you are 59 1/2. You original contributions though are tax free at any time.

The bets strategy is to invest in both plans. Use the IRA to diversify your holdings while receiving a tax benefit and use the 401k to receive extra money from your employer and a smaller tax benefit. The best investment strategy uses both to receive the most money and the most tax benefits.

Investing for your future is important. If you want to be successful and receive the most tax benefits, it is a good idea to use both the ira and the 401k. Make sure you always invest in the 401k up to your employers contribution. Using these two methods you can save a lot for retirement. - 23210

About the Author:

Joe James gives financial advice for a living. He resides in the southwest of the United States and is a retirement specialist. You can find out more information at his website, http://www.makegoodmoneywithme.com.

Forex Accounts Explained

By Ahmad Hassam

For trading success, good money management is the key. Many traders ignore this aspect of trading at their own peril and get their account blown in a few weeks of trading. Trading discipline means using a trading system based on money management rules that limit your risk and avoid making trading decisions based on emotions.

Without sufficient capital in your account, you wont be able to make meaningful capital gains. One of the worst blunders that forex traders can make is to trade without sufficient capital. Low capital increases your chances of getting blown out too soon. This does not mean that you should have a lot of capital before you start trading. You need to have sufficient capital in your account in order to take advantage of the movements in the currency markets. Low capital will never give you that opportunity.

Many forex brokers fix the minimum amount required to open a standard account as $2000. However, it is recommended by most of the professional traders that you should start with at least $2500-5000 to get good results. A trader with limited capital is always a worried trader. He is always looking to minimize losses beyond the point of realistic trading. Never ever trade live without practicing on the demo account for a few months. First, try to double your account at least three times in a row on the demo account.

A standard account or a regular account lets you trade a $100,000 standard lot with a $1000 deposit. This account is often also called 100k account. The broker is giving you an interest free loan of $100,000. This $1000 is kept as the margin or guarantee by the broker. This is a 1% margin. Your account should have more than $1000 if you want to trade.

When you open an account with the broker, you must determine what the default margin is. You can change the account margin to whatever you feel comfortable with. If you start with a 2% margin, then it will cost you $2000 to trade one standard lot.

Many brokers offer huge leverage to the new trades. This is done to entice them to trade more. You can get a leverage of up to 400% by some brokers. Using 400% leverage means trading $400,000 with a $1000 deposit. With a small deposit you are controlling a huge amount. Be careful! You will get wiped out in a moment. Dont use more than 4% leverage while trading in the start. Too much leverage is dangerous for you.

I am not saying that leverage is bad. You need to know it is a double edged sword that can cut both ways. It can increase your ROI but at the same time it can wipe you out in case of a slight market move going against you. Its just that you need to understand and learn how to use leverage. You can only do so with practice and with practice and more experience; you can increase the level of leverage in your trading.

The mini account was developed to accommodate investors who were looking for diversification of their stocks portfolios. You can open a mini account with a deposit of $300. This small dollar requirement allows many investors to participate in the forex markets who were previously unable to do so.

On a mini account, you have different lot sizes as compared to the standard account. One lot on a mini account means $10,000. You only need $50 to control a mini lot of $10,000. A pip size on the mini account is equal to $1 instead of $10 as on a standard lot.

If you lose 100 pips on a mini account, it means losing only $100. Losing 100 pips equal $1000 on a standard lot. A mini account reduces your risk by 10%. But it also reduces the profit that you can make by 10%. Start with at least $500 on a mini account. A mini account is a great way for new traders to practice forex trading. First develop the feel of how the forex markets work. Once you become an expert, trade on a standard account. Standard lot gives you the opportunity to make good ROI. - 23210

About the Author:

Mr. Ahmad Hassam is a Harvard University Graduate. He is interested in day trading and swing trading stocks and currencies. Discover A Revolutionary New Forex Robot. Develop your own Forex Trading System.